Analysis: Minds change on energy

Monday

Nov 26, 2012 at 12:01 AM

Walter C. Jones

ATLANTA - Something remarkable happened Tuesday during a brief meeting of a little-known state agency while most Georgians were focused on upcoming holiday shopping, turkey and college-football rivalries later in the week.

Passage of a one-sentence resolution may have started in motion a series of events that could dramatically reshape the state's electricity-generation as well as much of its political landscape. And it was initiated by two of the least-likely politicians.

What happened is the Georgia Public Service Commission voted 3-2 to endorse efforts by a start-up company to overturn a law, the Territorial Act, that has divided the state for four decades into geographic monopolies for 94 utilities run by cities, rural cooperatives and the giant Georgia Power Co.

The upstart, Georgia Solar Utilities Inc., seeks its own monopoly as a generator of solar power with permission to sell to retail customers. Since it can't produce electricity when the sun isn't shining, it would always be dependent on other utilities for supplemental power as well as for transmission, billing and customer support.

The commission vote doesn't guarantee General Assembly agreement, but it does provide a push.

Seasoned observers might bet against the legislature breaking up the monopolies. After all, they were granted for practical reasons that still have some basis.

When companies began damning up rivers to harness hydroelectric energy early in the last century, governments stepped in to regulate. When competitors strung power lines down opposite sides of city streets and chopping down rivals' poles in the dead of night, governments became the referees.

As the politicians began to sort out the winners and losers, they were persuaded by arguments that economies of scale dictated that larger companies would be more efficient than smaller ones when it came to damning rivers and building power plants, hence monopolies.

The commissioner who sponsored the resolution, Lauren "Bubba" McDonald, had been in the legislature in 1973 and voted in favor of the Territorial Act.

"I was there in 1973 when the act - legislation was passed," he said. "Solar wasn't even in the dictionary, I don't think, at that time, much less photovoltaic.... It was something that wasn't anticipated at that time."

He argued for removing obstacles to consumers who want access to more power generated from renewable sources.

McDonald wasn't the only veteran policymaker whose vote demonstrated a change of position. Commissioner Doug Everett, a great-grandfather and conservative legislator in the 1990s, also supported McDonald's resolution.

"You know, everybody in here realizes I've always fought solar because I did not think the technology was there for cost effectiveness. But it's changed, technology has changed," he said.

The cost of photovoltaic panels that convert sunlight into electricity has plummeted in recent years and by 30 percent in the first six months of this year due to a price war between Chinese producers. The result is solar is becoming competitive without tax breaks, mandates and subsidies from other energy sources, Everett said.

"But something else has changed that disturbs me even more, and very few people mention this. But this (federal) administration has said it's going to destroy the coal industry," he said.

With Georgia Power dependent on coal for nearly half its fuel, the commissioner expressed fear that the state could be left with in the dark if the Obama administration's environmental rules make burning coal prohibited or prohibitively expensive. The company is shifting its older coal plants to low-cost natural gas, but Everett predicted federal rules would also halt the fracking process that releases most of the gas currently produced in the United States.

"Just where are we going to get the generation to replace the coal industry? Just where are we going to get the generation to replace high cost back again on natural gas from five or six years ago?," he said.

The third commission vote in support of the resolution came from freshman Commissioner Tim Echols who installed a solar system on his Athens home and is an advocate of energy diversity. The two commissioners re-elected this month, Stan Wise and Chuck Eaton, voted no, although they had joined a unanimous motion moments earlier to allow Georgia Power to expand its voluntary use of solar power.

How the General Assembly reacts is anyone's guess.

For generations, Georgia Power has been a major presence at the Capitol. It has won many legislative battles, most recently last session when it beat back a bill that would have broken its monopoly in a different fashion by allowing companies to lease roof space for solar panels and sell the power to the owners of the roof.

The diminution of Georgia Power's commercial monopoly would signal its political weakening as well and constitute more evidence of the establishment getting pushed aside. Just as changing demographics is ushering in new voter coalitions, technological advances are reordering economics, and both are shaking up politics.

Ironically, it was not long-haired young radicals behind Tuesday's vote but two conservative political veterans and the oldest members of the Public Service Commission.

Walter Jones is the bureau chief for the Morris News Service and has been covering state politics since 1998. He can be reached at walter.jones@morris.com, 404-589-8424 or on Twitter @MorrisNews.